SUNNYVALE, Calif., April 20, 2011 /PRNewswire/ -- Cepheid (Nasdaq:
CPHD) today reported revenue for the first quarter of 2011 of
$60.2 million. Net income was
$0.5 million, or $0.01 per share, which compares to revenue of
$48.0 million and a net loss of
$4.3 million, or $(0.07) per share, in the first quarter of
2010.
Excluding amortization of purchased intangible assets and
employee stock-based compensation expense, non-GAAP net income for
the first quarter was $5.4 million,
or $0.08 per share. This
compares to a non-GAAP net loss of $0.2
million, or $(0.00) per share,
in the first quarter of 2010.
"Growth in our Clinical business continued in the first quarter
as our GeneXpert® system continues to gain recognition
as the most technologically advanced and innovative molecular
platform available," said John
Bishop, Cepheid's Chief Executive Officer. "With more
than 2,000 placements globally, the GeneXpert system is proving
itself to be a key workhorse in both developed and developing
country markets. The system's unique combination of accuracy,
ease-of-use, speed and flexibility is unmatched in the marketplace
today."
Operational Overview
- Total product sales of $57.6
million in the first quarter of 2011 compared to
$47.2 million in the first quarter of
2010. By business, product sales were, in millions:
|
Three Months
Ended March 31,
|
|
|
2011
|
|
2010
|
|
Change
|
|
|
|
|
|
|
|
|
Clinical Systems
|
$ 11.6
|
|
$ 9.7
|
|
20%
|
|
Clinical Reagents
|
38.6
|
|
29.6
|
|
31%
|
|
Total
Clinical
|
50.2
|
|
39.3
|
|
28%
|
|
|
|
|
|
|
|
|
Non-Clinical
|
7.4
|
|
7.9
|
|
-6%
|
|
Total Product
Sales
|
$ 57.6
|
|
$ 47.2
|
|
22%
|
|
|
|
|
|
|
|
- By geography, product sales were, in millions:
|
Three Months
Ended March 31,
|
|
|
2011
|
|
2010
|
|
Change
|
|
North America
|
|
|
|
|
|
|
Clinical
|
$ 36.3
|
|
$ 31.0
|
|
17%
|
|
Non-Clinical
|
5.9
|
|
6.1
|
|
-4%
|
|
Total North
America
|
42.2
|
|
37.1
|
|
14%
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
Clinical
|
13.9
|
|
8.3
|
|
68%
|
|
Non-Clinical
|
1.5
|
|
1.8
|
|
-15%
|
|
Total
International
|
15.4
|
|
10.1
|
|
53%
|
|
|
|
|
|
|
|
|
Total Product
Sales
|
$ 57.6
|
|
$ 47.2
|
|
22%
|
|
|
|
|
|
|
|
- During the quarter, Cepheid installed a total of 120 GeneXpert
systems in its commercial Clinical business. Additionally,
the company placed a total of 58 GeneXpert systems as part of its
High Burden Developing Country (HBDC) program. Including the
HBDC systems, a cumulative total of 2,038 GeneXpert systems have
been placed worldwide as of March 31,
2011.
- GAAP gross margin on product sales was 56% and non-GAAP gross
margin on product sales was 58%, which compares to 45% and 46%,
respectively, in the first quarter of 2010.
- Cash and cash equivalents were $80.5
million as of March 31,
2011.
- DSO was 43 days.
Business Outlook
For the fiscal year ending December 31,
2011, the company expects:
- Total revenue to be in the range of $245
to $255 million;
- Net income ranging from a net loss of $(0.01) to net income of $0.04 per share;
- Non-GAAP net income in the range of $0.31 to $0.36 per share.
Expected non-GAAP net income excludes approximately $19.5 million related to stock compensation
expense and approximately $2 million
related to the amortization of acquired intangibles. The
fully diluted share count for the year is expected to be
approximately 67 million and basic share count is expected to be
approximately 62 million.
Accessing Cepheid's First Quarter Results' Conference
Call
The company will host a management presentation at 2:00 p.m. Pacific Time on Wednesday, April 20, 2011 to discuss the results.
To access the live webcast, please visit Cepheid's website at
www.cepheid.com/investors at least 15 minutes before the scheduled
start time to download any necessary audio or plug-in software.
A replay of the webcast will be available shortly following
the call and will remain available for at least 90 days.
Interested participants may also listen to the live
teleconference call by dialing (800) 659-2056 or (617) 614-2714,
and entering participant code 15644634. A replay will be
available for seven days beginning at 4 p.m.
Pacific Time. Access numbers for this replay are (888)
286-8010 or (617) 801-6888, with passcode 25153977.
About Cepheid
Based in Sunnyvale, Calif.,
Cepheid (Nasdaq: CPHD) is a leading molecular diagnostics company
that is dedicated to improving healthcare by developing,
manufacturing, and marketing accurate yet easy-to-use molecular
systems and tests. By automating highly complex and
time-consuming manual procedures, the company's solutions deliver a
better way for institutions of any size to perform sophisticated
genetic testing for organisms and genetic-based diseases.
Through its strong molecular biology capabilities, the
company is focusing on those applications where accurate, rapid,
and actionable test results are needed most, such as managing
infectious diseases and cancer. For more information, visit
http://www.cepheid.com.
Use of Non-GAAP Measures
The company has supplemented its reported GAAP financial
information with non-GAAP measures that do not include employee
share-based compensation expense and amortization of purchased
intangible assets. The presentation of this additional
information is not meant to be considered in isolation or as a
substitute for results prepared in accordance with GAAP. The
company's management uses the non-GAAP information internally to
evaluate its ongoing business, continuing operational performance
and cash requirements, and believes these non-GAAP measures are
useful to investors as they provide a basis for evaluating the
company's cash requirements and additional insight into the
underlying operating results and the company's ongoing performance
in the ordinary course of its operations.
These non-GAAP measures may be different from non-GAAP measures
used by other companies. In addition, these non-GAAP measures
are not based on any comprehensive set of accounting rules or
principles. The company believes that non-GAAP measures have
limitations in that they do not reflect all of the amounts
associated with its results of operations as determined in
accordance with GAAP and that these measures should only be used to
evaluate the company's results of operations in conjunction with
the corresponding GAAP measures.
As described above, the company excludes the following items
from one or more of its non-GAAP measures when applicable:
Employee stock-based compensation expense. These expenses
consist primarily of expenses for employee stock options and
employee restricted stock under ASC 718 (formerly SFAS 123(R)).
The company excludes employee stock-based compensation
expenses from its non-GAAP measures primarily because they are
non-cash expenses that the company does not believe are reflective
of ongoing operating results. Further, as the company applies
ASC 718, it believes that it is useful to investors to understand
the impact of the application of ASC 718 on its results of
operations.
Amortization of purchased intangible assets. The
company incurs amortization of purchased intangible assets in
connection with acquisitions. The company excludes these
items because these expenses are not reflective of ongoing
operating results in the period incurred. These amounts arise
from the company's prior acquisitions and have no direct
correlation to the operation of the company's business.
Forward-Looking Statements
This press release contains forward-looking statements that are
not purely historical regarding Cepheid's or its management's
intentions, beliefs, expectations and strategies for the future,
including those relating to potential growth, future revenues and
future net income/loss, including on a non-GAAP basis. Because such
statements deal with future events, they are subject to various
risks and uncertainties, and actual results could differ materially
from the company's current expectations. Factors that could cause
actual results to differ materially include risks and uncertainties
such as those relating to: our success in increasing direct sales
and the effectiveness of new sales personnel; the performance and
market acceptance of new products; sufficient customer demand; our
ability to develop and complete clinical trials successfully in a
timely manner for new products; uncertainties related to the FDA
regulatory and European regulatory processes; the level of testing
at clinical customer sites; changes in the protocols or levels of
testing for Healthcare Associated Infections (HAIs); the company's
ability to successfully introduce and sell products in clinical
markets other than HAIs; the rate of environmental biothreat
testing conducted by the USPS, which will affect the amount of
consumable products sold to the USPS; unforeseen development and
manufacturing problems; the potential need for additional
intellectual property licenses for tests and other products and the
terms of such licenses; lengthy sales cycles in certain markets;
the company's reliance on distributors in some regions to market,
sell and support its products; the occurrence of unforeseen
expenditures, acquisitions or other transactions; the impact of
competitive products and pricing; the company's ability to manage
geographically-dispersed operations; and underlying market
conditions worldwide. Readers should also refer to the
section entitled "Risk Factors" in Cepheid's Annual Report on Form
10-K, its most recent Quarterly Report on Form 10-Q, and its other
reports filed with the Securities and Exchange Commission.
All forward-looking statements and reasons why results might
differ included in this release are made as of the date of this
press release, based on information currently available to Cepheid,
and Cepheid assumes no obligation to update any such
forward-looking statement or reasons why results might differ.
CONTACTS:
|
|
|
For Media
Inquiries:
|
For Investor
Inquiries:
|
|
Jared Tipton
Cepheid Corporate
Communications
Tel: (408) 400 8377
communications@cepheid.com
|
Jacquie Ross
Cepheid Investor
Relations
Tel: (408) 400 8329
investor.relations@cepheid.com
|
|
|
|
FINANCIAL
TABLES FOLLOW
CEPHEID
CONDENSED
CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS
(in
thousands, except per share data)
|
|
|
Three Months
Ended
March 31,
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
System sales
|
$ 12,691
|
|
$ 10,917
|
|
Reagent and disposable
sales
|
44,946
|
|
36,265
|
|
Total product
sales
|
57,637
|
|
47,182
|
|
Other revenues
|
2,582
|
|
863
|
|
Total revenues
|
60,219
|
|
48,045
|
|
Costs and operating
expenses:
|
|
|
|
|
Cost of product
sales
|
25,310
|
|
26,071
|
|
Collaboration profit
sharing
|
1,092
|
|
1,655
|
|
Research and
development
|
13,574
|
|
9,701
|
|
Sales and
marketing
|
11,447
|
|
8,985
|
|
General and
administrative
|
7,630
|
|
5,715
|
|
Total costs and operating
expenses
|
59,053
|
|
52,127
|
|
Income (loss) from
operations
|
1,166
|
|
(4,082)
|
|
Other expense, net
|
(199)
|
|
(276)
|
|
Income (loss) before income
taxes
|
967
|
|
(4,358)
|
|
Benefit from (provision for)
income taxes
|
(440)
|
|
19
|
|
Net income (loss)
|
$
527
|
|
$ (4,339)
|
|
|
|
|
|
|
Basic net income (loss) per
share
|
$
0.01
|
|
$
(0.07)
|
|
Diluted net income (loss) per
share
|
$
0.01
|
|
$
(0.07)
|
|
Shares used in computing basic
net income (loss) per share
|
61,161
|
|
58,936
|
|
Shares used in computing diluted
net income (loss) per share
|
65,028
|
|
58,936
|
|
|
|
|
|
|
|
|
|
|
CEPHEID
CONDENSED
CONSOLIDATED UNAUDITED BALANCE SHEETS
(in
thousands)
|
|
|
March
31,
2011
|
|
December
31,
2010
|
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
80,460
|
|
$
79,538
|
|
Accounts receivable,
net
|
28,385
|
|
28,010
|
|
Inventory
|
43,376
|
|
37,598
|
|
Prepaid expenses and other
current assets
|
6,184
|
|
4,138
|
|
Total current assets
|
158,405
|
|
149,284
|
|
Property and equipment,
net
|
29,094
|
|
27,438
|
|
Other non-current
assets
|
630
|
|
607
|
|
Intangible assets
|
23,740
|
|
24,688
|
|
Goodwill
|
17,689
|
|
18,594
|
|
Total assets
|
$ 229,558
|
|
$
220,611
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts
payable
|
$
20,425
|
|
$
21,957
|
|
Accrued
compensation
|
10,419
|
|
12,594
|
|
Accrued
royalties
|
7,627
|
|
7,994
|
|
Accrued other
liabilities
|
1,318
|
|
1,288
|
|
Current portion of
deferred revenue
|
8,223
|
|
8,207
|
|
Current portion of note
payable
|
1,693
|
|
1,679
|
|
Total current
liabilities
|
49,705
|
|
53,719
|
|
Long-term portion of deferred
revenue
|
4,718
|
|
4,057
|
|
Note payable, less current
portion
|
4,632
|
|
4,991
|
|
Other liabilities
|
3,402
|
|
4,182
|
|
Total liabilities
|
62,457
|
|
66,949
|
|
Shareholders’ equity:
|
|
|
|
|
Common stock
|
297,098
|
|
288,387
|
|
Additional paid-in
capital
|
76,980
|
|
72,731
|
|
Accumulated other
comprehensive income
|
678
|
|
726
|
|
Accumulated
deficit
|
(207,655)
|
|
(208,182)
|
|
Total shareholders’
equity
|
167,101
|
|
153,662
|
|
Total liabilities and
shareholders’ equity
|
$ 229,558
|
|
$
220,611
|
|
|
|
|
|
|
|
|
|
|
CEPHEID
CONDENSED
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in
thousands)
|
|
|
Three Months
Ended
March 31,
|
|
|
2011
|
|
2010
|
|
Cash flows from operating
activities:
|
|
|
|
|
Net income
(loss)
|
$
527
|
|
$ (4,339)
|
|
Adjustments to reconcile
net income (loss) to net cash used in operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
2,469
|
|
2,325
|
|
Amortization of intangible
assets
|
1,726
|
|
1,696
|
|
Stock-based compensation
related to employees and consulting services rendered
|
4,400
|
|
3,746
|
|
Unrealized gain on auction
rate securities
|
-
|
|
(1,425)
|
|
Unrealized loss on put
option
|
-
|
|
1,571
|
|
Deferred rent
|
36
|
|
25
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
(840)
|
|
(5,051)
|
|
Inventory
|
(5,882)
|
|
1,500
|
|
Prepaid expenses and other
current assets
|
(1,232)
|
|
(997)
|
|
Other non-current
assets
|
(23)
|
|
36
|
|
Accounts payable and other
current liabilities
|
(2,498)
|
|
(2,254)
|
|
Accrued
compensation
|
(2,175)
|
|
(1,994)
|
|
Deferred
revenue
|
677
|
|
180
|
|
Net cash used in operating
activities
|
(2,815)
|
|
(4,981)
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
Capital
expenditures
|
(3,543)
|
|
(3,998)
|
|
Payments for technology
licenses
|
(1,000)
|
|
(1,000)
|
|
Cost of acquisitions,
net
|
(296)
|
|
(574)
|
|
Proceeds from the sales of
short-term investments
|
-
|
|
4,125
|
|
Proceeds from the sale of
fixed assets
|
20
|
|
78
|
|
Net cash used in investing
activities
|
(4,819)
|
|
(1,369)
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
Net proceeds from the
issuance of common shares and exercise of stock options
|
8,711
|
|
3,461
|
|
Principal payment of bank
borrowing
|
-
|
|
(4,020)
|
|
Principal payment of notes
payable
|
(345)
|
|
(82)
|
|
Net cash provided by (used
in) financing activities
|
8,366
|
|
(641)
|
|
|
|
|
|
|
Effect of exchange rate change
on cash
|
190
|
|
337
|
|
Net increase (decrease) in cash
and cash equivalents
|
922
|
|
(6,654)
|
|
Cash and cash equivalents at
beginning of period
|
79,538
|
|
35,786
|
|
Cash and cash equivalents at end
of period
|
$ 80,460
|
|
$ 29,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CEPHEID
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES (UNAUDITED)
(in
thousands, except per share data)
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2011
|
|
2010
|
|
Cost of product sales
|
$ 25,310
|
|
$ 26,071
|
|
Stock compensation
expense
|
(499)
|
|
(470)
|
|
Amortization of
purchased intangible assets
|
(344)
|
|
(328)
|
|
Non-GAAP measure of cost of
product sales
|
$ 24,467
|
|
$ 25,273
|
|
|
|
|
|
|
Gross margin on product sales
per GAAP
|
56%
|
|
45%
|
|
Gross margin on product sales
per Non-GAAP
|
58%
|
|
46%
|
|
|
|
|
|
|
Operating expenses
|
$ 32,651
|
|
$ 24,401
|
|
Stock compensation
expense
|
(3,901)
|
|
(3,276)
|
|
Amortization of
purchased intangible assets
|
(108)
|
|
(81)
|
|
Non-GAAP measure of operating
expenses
|
$ 28,642
|
|
$ 21,044
|
|
|
|
|
|
|
Income (loss) from
operations
|
$
1,166
|
|
$
(4,082)
|
|
Stock compensation
expense
|
4,400
|
|
3,746
|
|
Amortization of
purchased intangible assets
|
452
|
|
409
|
|
Non-GAAP measure of income
(loss) from operations
|
$
6,018
|
|
$
73
|
|
|
|
|
|
|
Net income (loss)
|
$
527
|
|
$
(4,339)
|
|
Stock compensation
expense
|
4,400
|
|
3,746
|
|
Amortization of
purchased intangible assets
|
452
|
|
409
|
|
Non-GAAP measure of net income
(loss)
|
$
5,379
|
|
$
(184)
|
|
|
|
|
|
|
Basic net income (loss) per
share
|
$
0.01
|
|
$
(0.07)
|
|
Stock compensation
expense
|
0.07
|
|
0.06
|
|
Amortization of
purchased intangible assets
|
0.01
|
|
0.01
|
|
Non-GAAP measure of net income
(loss) per share
|
$
0.09
|
|
$
(0.00)
|
|
|
|
|
|
|
Diluted net income (loss) per
share
|
$
0.01
|
|
$
(0.07)
|
|
Stock compensation
expense
|
0.06
|
|
0.06
|
|
Amortization of
purchased intangible assets
|
0.01
|
|
0.01
|
|
Non-GAAP measure of net income
(loss) per share
|
$
0.08
|
|
$
(0.00)
|
|
|
|
|
|
|
Shares used in computing diluted
net income (loss) per share
|
65,028
|
|
58,936
|
|
Incremental
shares from the assumed conversion of dilutive stock
options
|
922
|
|
-
|
|
Shares used in computing
Non-GAAP diluted net income (loss) per share
|
65,950
|
|
58,936
|
|
|
|
|
|
SOURCE Cepheid